Chinese interest in Australian sugar company sparks concern

Sue Lannin

Last Updated: Thu, 14 Jan 2010 15:19:00 +1100

A body representing Australian-owned businesses has called for a review of the Foreign Investment Review Board's practices.

Ausbuy has expressed concerns about a Chinese state-owned company's plans to invest in the Australian conglomerate CSR.

Bright Food has told CSR it's interested in its sugar and renewable energy assets.

Ausbuy's chief executive Lynne Wilkinson says it's another example of a foreign firm wanting to buy Australia's wealth.

"Some people call it investment ... we don't call it investment. We believe what they're doing is buying companies that have got steady cash flow."

"They are also targeting businesses which have got commodity products. The Foreign Investment Review Board needs to be much more empowered and really look at the bottom line of the implications," she said.

Bright Food says it values CSR's assests at $US1.5 billion but CSR has dismissed the offer as merely an expression of interest.

Senior investment adviser at Perspective Group, Mark Causer, says moves by the Australian government to clear up foreign investment rules have encouraged China to try to invest more locally.

"It just demonstrates the interest that Chinese companies have had in Australia," he said.

"With the announcement last year of the improved conditions, in my opinion, to the foreign investment review board rules it's opened the door if you like for Chinese investment into Australia."

China is the third biggest investor in Australia and has overtaken Japan as Australia's biggest trading partner.

Chinese coal producer Yanzhou Coal has just taken over Felix Resources, which has coal mines in New South Wales and Queensland.

Chinese firms have also taken substantial stakes in major Australian companies including Rio Tinto and Fortescue Metals.

Mark Causer say there is more to come and Australians shouldnt be afraid.

"I see that as a good oppurtunity to move forward. If it wasn't a Chinese company, it could have been a Japanese company, it could have been an Indian company...the fact that it's China, I don't think it's an issue from where we stand," he said.

Caution urged

Meanwhile the Opposition's finance spokesman, Barnaby Joyce has raised concerns about Bright Food's interests in CSR.

Senator Joyce says any bid should be considered with caution.

"We have to continually ask the question do we want governments to the purchaser of assets, especially of another nations government or part of another nations government," he said.

"It creates confusion and we've seen that and is it a good long term position for Australia to be in?"

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